TRADE
POLICY REVIEWS: FIRST PRESS RELEASE, SECRETARIAT
AND GOVERNMENT SUMMARIES

PRESS
RELEASE
PRESS/TPRB/135
14 june 2000

Norway: June
2000

Norway
has continued to remove barriers to trade and investment
through its participation in the wto and the european
economic area (eea), says a new wto report on the trade
policies of norway. This, and a skilful exploitation of
natural resources, has helped norway attain high living
standards and full employment. The report adds, however,
that norway's liberal regime is marred by inordinate
protection to agriculture and that a few remaining trade
and investment distortions, including those that may
arise from subsidies for regional and industrial policy
reasons and from certain investment barriers to non-eea
investors, need to be addressed to help assure the
sustainability of living standards.

Norway's
liberal trade regime is marred by a few but significant
trade distortions - particularly in agriculture

The
wto secretariat report, along with a statement by the
norwegian government, will serve as a basis for the trade
policy review of norway which will take place in the wto
trade policy review body on 21 and 23 june 2000.

The report notes that most of norway's trade is conducted
duty free under the eea and other preferential
arrangements, with some 73% of industrial tariff lines
also subject to zero mfn rates. In general, tariffs on
industrial goods are low: the average mfn tariff on
industrial products declined from 5.6% in 1995 to 2.3% in
2000. In contrast, the average mfn tariff on agricultural
products is 38.7%. Various agricultural products are
subject to tariff quotas. Overall, norway's average mfn
tariff in 2000 is 8.1%, less than half the applied rate
in 1995.

The report says that norway runs a wide-ranging
generalized system of preferences (gsp); it also grants
almost all imports from least-developed countries duty
free entry. Under norway's gsp, imports of manufactures
from ordinary beneficiary developing countries generally
enjoy duty-free access, with textiles, clothing and
footwear among the notable exceptions. Preferential
treatment is also accorded to selected agricultural
products. The average tariff for all imports from gsp
ordinary beneficiaries in 2000 is 5.3%.

The report notes that norway pursues regional interests
actively, particularly through its participation in the
eea and the european free trade association (efta). As an
efta member, norway participated in efta's free-trade
agreements with central european and mediterranean
countries. The report states that although such
preferential agreements provide for free trade in goods
except for some unprocessed agricultural products, the
large and expanding preferential network raises concerns
about possible distortions. The report suggests that such
concerns would be diffused by extending these preferences
on a non-discriminatory basis and securing them
multilaterally. This would also prevent over-reliance on
the eea market.

The report says that investment in most areas is largely
open to foreigners and national treatment is generally
granted to foreign investors except in some key sensitive
areas such as fisheries and airline operation.

In agriculture, the report says, substantial border
protection is combined with price support measures. The
latter are being gradually replaced with direct income
payments. The report notes that overall assistance to
domestic producers remains high, at a level almost equal
to the value added generated by the sector. Assistance is
largely concentrated in a small number of products,
namely dairy products, beef and veal, and pork meat.

Norway is the largest exporter of crude oil outside the
organization of the petroleum exporting countries (opec),
ranking second in the world after saudi arabia. Petroleum
exports contribute some 30% of norway's total export
earnings. The report notes that petroleum activities are
generally open to foreign companies, although state
ownership in the sector remains large.

Norway's wto services commitments grant unlimited market
access and national treatment in a large number of
services. Services account for some 57% of gdp and
provide jobs to almost three quarters of the employed
labour force. Shipping is norway's second largest source
of export revenue. The report notes that norway has
implemented a number of changes in recent years, mainly
in the financial services, telecommunications and postal
services, and maritime transport. For example, state
participation in the banking system, although still
significant, has been reduced since 1996. In the
telecommunications sector, the market was fully
liberalized in 1998 and the monopoly rights of the
state-owned company, telenor, abolished.

Notes
to editors

trade policy reviews are an exercise, mandated in the wto
agreements, in which member countries trade and
related policies are examined and evaluated at regular
intervals. Significant developments which may have an
impact on the global trading system are also monitored.
For each review, two documents are prepared: a policy
statement by the government of the member under review,
and a detailed report written independently by the wto
secretariat. These two documents are then discussed by
the wtos full membership in the trade policy review
body (tprb). These documents and the proceedings of the
tprbs meetings are published shortly afterwards.
Since 1995, when the wto came into force, services and
trade-related aspects of intellectual property rights
have also been covered.

for this review, the wtos secretariat report,
together with the policy statement prepared by norway,
will be discussed by the trade policy review body on 21
and 23 june 2000. The secretariat report covers the
development of all aspects of norway's trade policies,
including domestic laws and regulations, the
institutional framework, trade policies by measure and by
sector.

attached to this press release is a summary of the
observations in the secretariat report and parts of the
government's policy statement. The secretariat report and
the governments policy statement are available for
the press in the newsroom of the wto internet site
(www.wto.org). These two documents and the minutes of the
tprbs discussion and the chairmans summing
up, will be published in hardback in due course and will
be available from the secretariat, centre william
rappard, 154 rue de lausanne, 1211 geneva 21.

summary

Overview

I.
Trade policy objectives and developmentA. The world trade organization
1. The uruguay round of negotiations was of major
importance to norway. The stronger, broader and clearer
legal framework resulting from the negotiations has laid
the foundation for more equal terms of competition
between large and small trading nations, thus reducing
the risk of unilateral trade measures. The world trade
organization is there to ensure that no member country
pursues national policies to the detriment of other
members' trade interests, and that global trade is
conducted according to an open, multilateral trading
system based on common rules.
2. Since 1947, norway has played an active role in the
development of the gatt and the wto in order to ensure
the stability, security, transparency, and predictability
necessary to an open, outward-oriented economy such as
ours. We see the preservation and development of a strong
rules-based system as the best guarantee against
unilateralism and protectionism.
3. Norway favours further trade policy negotiations aimed
both at strengthening the multilateral trading system and
the gradual opening of markets. Norway is therefore a
strong advocate for the launch of a broad and
comprehensive round of multilateral trade negotiations.
Norway participated actively in the preparations for the
seattle ministerial conference and tabled proposals for
mandates in most areas under consideration for
negotiations. Norway sees the unsuccessful talks on a
mandate for the negotiations at seattle as a temporary
setback.
4. Norway actively participates in the mandated
negotiations on the built-in agenda. However, for these
negotiations to lead to substantial improvements in the
trading environment, they should be seen as contributions
to a broader, more comprehensive round of multilateral
trade negotiations. It is in norways trade policy,
economic and political interest that such a broad round
of negotiations includes, in addition to the built-in
agenda, inter alia special and differential treatment for
developing countries; market access for industrial
products including fish and fish products; transparency
in government procurement; trade facilitation; trade and
investment; trade and competition and trade and
environment. The round should also cover issues resulting
from a review of the implementation of the uruguay round
agreements in such areas as anti-dumping, subsidies and
countervailing measures.
5. Norwegian trade policy towards developing countries
plays an increasingly important role in the formulation
of norwegian foreign and development cooperation policy.
Norway will continue to promote improvements to the
multilateral trading system and encourage greater
integration of the developing countries, especially the
least developed countries, by means of improved market
access, transitional arrangements, technical and
financial support and other measures. To this end, norway
has contributed approximately us$3.3 million to the
wtos programmes for technical assistance.
Furthermore, norway continues to advocate that the wto
programmes in this field be financed over the
organizations regular budget, rather than mainly by
voluntary contributions to a global trust fund. Norway
has also signed the agreement to establish an independent
legal advisory centre on wto law.
6. Norway continues to target and strengthen its
bilateral efforts to promote trade with developing
countries, for example by implementing improvements to
the generalised system of preferences (gsp). Of
particular importance is improving in a real and
effective way market access conditions for products
originating in the least developed countries.
7. The process of ensuring that trade and environmental
policies are mutually supportive is one to which norway
attaches particular importance. We therefore find it
important that environmental aspects are taken into
account in future trade negotiations. In this regard
sustainability reviews are a valuable means of helping to
achiev the objective of integrating environment and
development concerns into trade policies. Norway has, for
its part, initiated environmental reviews and has
encouraged others to do the same.
8. Norway also participates actively in the ongoing trade
and environment discussions in the wto. Analysis of the
interaction between trade and environment policies is a
priority. Identifying win-win, or even win-win-win
situations (trade/environment/development), is of special
importance, for example in analysis of the relationship
between subsidies, trade and the environment. Norway also
finds it important to continue studying trade-related
aspects of eco-labelling and meas.
9. In the area of services, a fundamental step towards
trade liberalization was taken in the uruguay round with
the gats agreement, which outlines the framework for
trade in services. In the present negotiations, norway is
looking for real trade liberalisation over a broad range
of sectors, including maritime transport and other
maritime services, telecommunications, environmental
services and offshore-related services, as well as
improvements of the gats agreement itself.
10. For norway, as one of the worlds major
suppliers of maritime transport services, it is of
particular concern that binding market access and
national treatment commitments have not been entered by
major trading nations for that sector. Ships account for
about 90% of international goods transport.
Liberalization in this sector would therefore benefit all
countries. It is a paradox that negotiations on the
fairly liberalised maritime transport services sector,
which is crucial to the flow of goods, were not more
successful in 1996.
11. The market access negotiations of the uruguay round
resulted in increased export opportunities for a number
of industrial products of interest to norway. However,
the results had a limited effect on trade in fish and
fishery products. As of today more than 150 countries
import norwegian seafood, establishing norway as the
worlds largest exporter of seafood. Further growth
in the fishing industry is, however, limited by market
access restrictions, for example due to high tariff rates
on seafood exports. We therefore attach great importance
to a new broad round of multilateral negotiations to
provide the necessary forum for achieving increased
market access through substantial reductions of bound
tariffs for industrial goods, including fish and fish
products. As the fishery sector is very vulnerable to
non-trade measures, we also favour that forthcoming
market access negotiations include non-tariff measures.
12. The norwegian import regime for agricultural products
changed fundamentally following the implementation of the
wto agreement on agriculture. All non-tariff import
measures have been replaced by customs tariffs. Domestic
support measures have been adapted in accordance with the
wto agreement. Export subsidies have been reduced in
compliance with wto commitments.
13. Article 20 of the wto agricultural agreement provides
for the continuation of negotiations in the agricultural
sector and refers to the "long-term objective of
substantial progressive reductions in support and
protection". It also lays down that further
negotiations shall take into account inter alia
experience gained from implementing the existing
agreement and non-trade concerns.
14. As regards non-trade concerns, norway has emphasised
the multifunctional and multifaceted nature of
agriculture as a supplier of public goods such as rural
settlement, food security and a living cultural
landscape, cultural heritage and biodiversity. These are
key aspects of the agricultural sector that need to be
properly reflected in the continuation of the reform
process.
15. The goal is to safeguard national flexibility in
agricultural policy design by allowing the use of
appropriate measures to ensure viable agricultural
production throughout the country.
16. The transition to tariff-based protection in
agriculture in norway facilitated market access for
agricultural products from developing countries, in
particular from the least developed countries. Under the
norwegian generalised system of preferences, all
agricultural products from the least developed countries
are eligible for preferential treatment, with zero duty
on all products except for grain, flour and
feedingstuffs. The latter qualify for a 30% cut in duties
up to certain quantitative ceilings. In the year 2000,
the special safeguard mechanism within the gsp system
will be invoked if imports of duty-free beef from the
least developed countries exceed 2700 tons. For other
developing countries, all products except milk and dairy
products, live animals and certain processed agricultural
products are included in the scheme. The reductions for
these countries range from 100% to 10%.
17. The trips agreement represents a significant step
towards safeguarding patents and other intellectual
property rights. A well-functioning patent system is of
vital importance to innovation, trade and economic
growth. Norway has experienced that the patent system has
demonstrated an ability to adapt to shifting needs for
the protection of technology in new areas. Without the
security of respect for their rights, owners of
intellectual rights would be reluctant to agree to the
introduction of products and services to new markets. It
is therefore of great importance to both exporting and
importing countries that the obligations under the trips
agreement are fully implemented.
18. Given the increasing globalisation of the world
economy, it is also necessary to devise rules that
encompass areas of trade not yet covered by the
multilateral trading system. In our view, new
multilateral rules within the wto should be developed in
areas such as competition, investment, and trade
facilitation.
19. Investment policy related to services is already
covered by the gats, but there are no global rules for
international investment that affect trade. The enormous
increase in foreign direct investments as well as the
proliferation of bilateral investment agreements
underline the need for global rules.
20. Though the uruguay round succeeded in allaying many
of norway's concerns regarding trade rules, there is
still need for further improvement in future rule-making,
for example on anti-dumping.
21. Norway has noted the increasing resort to
anti-dumping and other trade remedy actions, both
regarding the number of actions as well as the number of
countries applying actions. This development is a cause
for concern to norway and poses a challenge to the
multilateral trading system. Some wto rules, for example
provisions regarding anti-dumping, lack clarity. Norway
would generally advocate clear provisions, narrowing the
scope for national discretion. In this connection, norway
would welcome discussions regarding the limitations under
the anti-dumping agreement in respect of the dispute
settlement understanding.
22. Norway follows a cautious policy with respect to
application of trade remedy instruments. No safeguard,
anti-dumping or countervailing measures or investigations
have been applied or initiated during the past ten years.
23. The agreement on subsidies and countervailing
measures provides important discipline regarding
subsidies. Norway believes that the agreements
structure regarding prohibited as well as non-actionable
subsidies should be maintained.
24. In norways view, the dispute settlement
mechanism has proven its value over the first years of
its operation. Although norway has only participated as
third party in a few cases, we have noted with
satisfaction that not only large industrialised members,
but also developing country members have taken advantage
of the mechanism.
25. New technologies, including e-commerce, for
distributing services and goods have introduced new and
demanding challenges for both exporters, importers, users
of intellectual property rights and governments. Norway
is in the forefront of the development and use of
electronic networks. From a norwegian point of view the
trading system must continue to evolve in such a way that
it fosters this development and helps reduce the
potential conflicts between interested parties to an
absolute minimum. Only through a well-balanced and open
trade regime based on the principle of technological
neutrality can this be possible.
26. For norway, the average reduction in import duties
resulting from the uruguay round was, for industrial
products, including fish and fishery products, 39.5%
(weighted average). The reductions resulted in a weighted
average tariff rate of 2% for manufactured goods. The
reductions have been implemented on schedule. In
addition, norway has, on a unilateral basis, launched an
ongoing process of simplification of our customs tariff,
leading i.e. To the abolition of tariffs of less than 3%.
27. Norway has faithfully implemented the agreement on
textiles and clothing, and has come a long way in
integrating textiles and clothing into the gatt. Of the
54 quantitative restrictions maintained at the start of
wto, norway has liberalised all but three quotas for one
product (fishing nets).
28. Norway recognises the primacy of the multilateral
regime for trade established by the wto. At the same time
norway is a party to several regional trade agreements,
i.e. As a member of efta (the european free trade
association), and thereby party to several free
agreements, as well as a party to the eea agreement.
Norway sees regional trade and inter-regional
arrangements as instruments to complement the global
regime and accommodate the need for deeper economic
integration. Regional agreements promote trade and
economic development at regional level, and will in the
longer run pave the way for multilateral and broad trade
liberalisation. Consequently, norway will continue to
pursue regional and bilateral agreements, in conformity
with article xxiv of the gatt and article v of the gats,
in order to expand trade and economic cooperation with
our partners in europe, the mediterranean area and
further afield, and thus safeguard norwegian business
opportunities.
29. The norwegian government holds the view that the
trading regime of the individual wto members should be
based on basic rights, including core labour standards as
defined in the ilo. Norway participates actively in the
ilo and has ratified all major conventions relating to
labour standards. An active dialogue with the parties on
the labour market is a prerequisite for facilitating a
better understanding of national principles honouring
core labour standards. The norwegian government has
established integrated national labour market policy
frameworks, which recognise the links between the labour
market, social development and economic performance. B. The european economic area (EEA)
30. The agreement on the european economic area (eea)
extends the single market of the fifteen eu member states
to the three efta countries norway, iceland and
liechtenstein. The agreement on the european economic
area substantially widens and deepens the free trade
relations through the free trade agreement concluded in
1973 between the ec and norway. The eea agreement unites
the 15 eu member states and the three efta-eea states
into one single market governed by the same basic rules.
These rules cover free movement of goods, persons,
capital and services (the four freedoms). Under the
agreement the efta-eea states are able to contribute to
the shaping of this legislation.
31. In addition to internal market legislation the
agreement includes flanking and horizontal policies
intended to strengthen the internal market. These
additional fields of cooperation include research and
development, statistics, education, social policy, the
environment, consumer protection,
Tourism, small- and medium-sized enterprises, culture,
information services and audio-visual services. The
efta-eea states participate in eu programmes in these
fields and have a voice in developing and managing them
through participation in their committees.
32. The agreement on the european economic area does not
cover the eus common agricultural policy or the
common fisheries policy, but contains provisions on
various aspects of trade in agricultural and fish
products. As the eea agreement is not a customs union,
trade policy towards third countries remains outside its
scope.
33. One of the central features of the agreement on the
european economic area, and the one which distinguishes
it most from other international agreements under public
law, is that its common rules are continuously updated by
adding new ec legislation. This aspect is essential given
the large output of community legislation on the internal
market. Each month a number of eea-relevant pieces of
legislation are incorporated into the agreement by
decision of the eea joint committee. The agreement
provides for information and consultation procedures at
all stages of the communitys decision-shaping
process. Efta experts are consulted by the eu commission
in its preparation of draft legislation. The efta-eea
states can ask for consultation on matters of concern,
and can negotiate adaptations to community legislation as
it applies to the efta countries when special
circumstances make this necessary. Since the entry into
force of the agreement, more than 2000 ec legal acts have
been incorporated into the agreement. Important new
legislation has for example been incorporated into annex
i regarding veterinary and phytosanitary matters. C. Free trade agreements
34. In the ministerial declaration from the efta
ministerial meeting in bergen in june 1995, ministers
expressed their intentions to make a dynamic and
independent contribution to improving economic conditions
across europe and beyond. Starting in 1992, the efta
states have concluded free trade agreements with poland,
hungary, the czech republic, the slovak republic,
bulgaria, romania, slovenia, estonia, latvia, lithuania,
israel, turkey, morocco and the plo for the benefit of
the palestinian authorities. Negotiations on free trade
agreements with canada, macedonia, tunisia, egypt, jordan
and cyprus are currently under way, and technical talks
have taken place with chile and mexico in order to
explore the basis for free trade negotiations.
35. Efta's free trade agreements cover free trade in
industrial products, fish and marine products and
processed agricultural products. In addition, each efta
country has concluded bilateral agricultural protocols
with each of the third country partners. The bilateral
agricultural protocols are an integral part of efta's
multilateral agreements. The free trade agreements
incorporate provisions on a number of new trade issues,
including rules of competition, state aid, public
procurement and protection of intellectual property. The
agreements also contain evolutionary provisions for
services and investments, as the parties recognise the
growing importance of these areas and will co-operate
with the aim of achieving the gradual liberalisation and
mutual opening of markets for investments and trade in
services, taking into account developments in european
integration and the wto.
36. Most of these agreements are of an asymmetrical
nature; while the efta states abolish barriers to trade
at the outset, the partner countries can, for certain
sensitive products, phase them out during a transitional
period, leaving them the necessary time to adapt their
economy to free trade conditions.
37. Norway also takes part in the european cumulation of
origin system, established as of 1 january 1997 between
the european union, the efta states and the central and
eastern european countries.